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The row over American data surveillance could damage confidence in the world’s biggest economy as well as making companies more cautious about embracing new technology, Sir Martin Sorrell has warned.

The chief executive of WPP, who has already raised concerns that the recent budget standoff in Washington might diminish “brand America”, said that the latest claims about US eavesdropping would further dent the country’s international standing.

After months of allegations based on Edward Snowden’s leaks of confidential National Security Agency files, consumers have become more wary about trusting companies with their private information. That could hinder advertising companies, which are